Tata pension - change from RPI to CPI and maybe more

uk1

kidmugsy wrote: »

True but irrelevant. The govt apparently now proposes to interfere in contracts between members and their schemes. All over some tuppenny-ha'penny firm going bust.

My apologies. I thought it relevant to your post.

it is terrible when this sort of thing happens, but what is the point of being sanctimonious about a point of principle if the practical outcome of that is that it is taken into the PPF and members lose out.

It is the choice of choosing the lessor of two unacceptable options.

Jeff

veryintrigued

Andy_L wrote: »

We haven't made battleships since the 1940's & nuclear submarines aren't made out of the sort of bog-standard steel that Tata has been unable to make a profit producing.

I'd suggest you may want to use a search engine and see just how much of our fleet including submarines, destroyers etc etc etc use Tata (and other UK steel makers) supplied material.

In the mean time back on thread eh...

kidmugsy

uk1 wrote: »

what is the point of being sanctimonious about a point of principle if the practical outcome of that is that it is taken into the PPF and members lose out.

There is no guarantee that the members won't "lose out" under whatever arrangement the government is considering. But it would set a horrible precedent, setting aside rule of law for some temporary political advantage. The purpose, after all, isn't to defend the members, it's to advance the government's political interests. You do understand that these people are politicians?

jamesd

PensionTech wrote: »

The circumstances aren't particularly special, so I don't know why we should be thinking about such drastic action just for this employer

Because the alternative is the PPF or perhaps the pension getting ownership of the company and all of its loss-making assets and having to try to operate the business. Either seems likely to be a worse outcome than a change to inflation linking measure.

PensionTech wrote: »

Unless legislation were to be passed with specific reference to the British Steel scheme

The current proposal is to specifically name this one scheme and try to dance away any state aid rules issues.

This definitely has its difficulties but it also looks like a pragmatic and realistic solution that may succeed in minimising the harm to the members of this scheme and the current employees

uk1

kidmugsy wrote: »

There is no guarantee that the members won't "lose out" under whatever arrangement the government is considering. But it would set a horrible precedent, setting aside rule of law for some temporary political advantage. The purpose, after all, isn't to defend the members, it's to advance the government's political interests. You do understand that these people are politicians?

I wish you resisted the temptation of being condescending and patronising. It is not "horrible precedent" as you say because vrtually all laws change existing laws and so the "precedent" is set every day.

What you seem not to consider is that the government is trying to achieve here for what you call advancing political interests and advanatge is to seek the best possible outcome for the employees of this company by trying to attract a new owner. Whatever you may think the government are not going to nationalise this company and they are trying to find a pragmatic solution that is in the best interests of the employees.

As it happens a lot of people are in final pension schemes that have increases that were promised earlier but are in the trust document as "discretionary".

The reality is if the government doesn't do something along these lines, then there will over the next decade be an avalanche of schemes joining the PPF and that will then need taxpayers cash to underwrite benefits not enjoyed by others. I think many also forget that the PPF takes a double whammy each time a new fund enters. It gains a huge liability and loses the annual contribution.

Bizarrely the cause of this situation in my view was Gordon Brown ..... a labour man if I recall.


Jeff

kidmugsy

uk1 wrote: »

I wish you resisted the temptation of being condescending and patronising. It is not "horrible precedent" as you say because vrtually all laws change existing laws and so the "precedent" is set every day.

You believe that there is retrospective legislation every day. OK, point us to yesterday's, Tuesday's and Monday's.

kidmugsy

uk1 wrote: »

As it happens a lot of people are in final pension schemes that have increases that were promised earlier but are in the trust document as "discretionary".

If the trust document said they were discretionary, then they weren't promised.

uk1

kidmugsy wrote: »

You believe that there is retrospective legislation every day. OK, point us to yesterday's, Tuesday's and Monday's.

As you wish. Here are laws (Bills) passed each day.

http://www.legislation.gov.uk/new/2016-05-25

If you read carefully you will find that almost all enhance, change or revoke an existing law.

Jeff

uk1

kidmugsy wrote: »

If the trust document said they were discretionary, then they weren't promised.

I can see you are arguing with me for the sake of it ..... :cool:

In a recent court case brought against my own employers, a high court judge agreed that employees were promised increases in many documents the company issued but as they were not in the pension deeds they were not contractual.

Jeff

Shedman

kidmugsy wrote: »

Did the change of rules affect the pension rights you had already accrued?

My reading of the BBC article and certainly the quote from the British Steel Pension chairman indicate that the changes being proposed would affect future increases not already accrued ones (or have I misread that?) - in which case that doesn't seem out of line with what a lot of private schemes have / are doing or proposing.

Anyway to answer your question I believe PensionTech was correct in the assumptions in the subsequent post as to the impact on accrued rights in respect of my scheme ie change to CPI effectively retrospective but reduction in capping only applying to pension accruing beyond a certain date (although they also subsequently introduced a cap on pensionable salary level so it couldnt rise beyond a certain level regardless of what your actual salary...)